Premier Foods has agreed to buy RHM for £1.2 billion to create Britain's biggest food producer.
Premier Foods, home to Angel Delight desserts and Smash instant mashed potato, said today it would pay one new share and 83.2 pence in cash for each RHM share.
Premier Foods said it had identified around £85 million of annual cost savings from combining the two businesses and that it would look to develop strategic partnerships with major retailers.
Food groups have come under pressure in recent years as powerful supermarket operators have forced down prices in a fierce battle for market share.
